Gleaves Swearingen Updates

Mandatory Sick Leave Is Here (But the Picture’s Far from Clear)

September 26, 2014

On July 28, Eugene passed an ordinance mandating that businesses provide paid sick leave to all employees working within Eugene city limits. The law applies to employers of all sizes, even those with only one employee. It is scheduled to go into effect on July 1, 2015

Brittany Quick-Warner, Director of Business Advocacy for the Eugene Chamber of Commerce, prepared a good summary of the ordinance right after it passed, which I set out below. As Ms. Quick-Warner’s summary indicates, the City Council left many critical details of the law to be determined, via administrative rules that the Eugene City Manager must issue by January 31, 2015.

Because so many important details of the sick-leave ordinance are left to the administrative rules, the unfortunate truth is this: at this point, no one knows exactly what the new law will require. Therefore, although many employers would like to start taking steps now to bring themselves into compliance, they find themselves somewhat hamstrung.

Moreover, the uncertainties surrounding the law extend well beyond those stemming from the City Council’s broad delegation of rulemaking authority to the City Manager. For example, on July 21, one week before Eugene passed its sick-leave ordinance, the Lane County Board of Commissioners passed its own ordinance that purports to preempt Eugene’s new law, setting up a likely “battle of the ordinances” in the courts, whose outcome cannot be predicted with any certainty. In addition, private parties and organizations will likely bring some (potentially viable) legal challenges to the law, based on certain provisions of the Oregon Constitution. Finally, there is always the possibility that the State Legislature will enact legislation that preempts or supersedes Eugene’s local ordinance.

In short, there is just too much uncertainty regarding the new law right now to recommend that any business immediately invest major resources to bring their employment policies into compliance with it. That said, although a wholesale revision of your employment policies is certainly premature, it’s not too early to start developing a general strategy regarding how your business will react when the administrative rules come out in January. After all, even if Eugene’s ordinance is ultimately struck down by the courts, that likely will not happen before July of 2015, when the law is scheduled to take effect. (As you may have heard, the wheels of justice turn slowly.) Therefore, affected businesses should proceed on the assumption that they need to be ready to comply with the law by July of next year, and their human resources staff (or whomever is responsible for their employment policies) should be ready to make any appropriate revisions to their employment policies in the roughly five-month span between promulgation of the administrative rules and date that the law is schedule to go into effect.

With that in mind, here are two questions affected businesses would be well served to contemplate now, while we await the promulgation of the administrative rules:

If we currently have separate categories of paid time off (sick leave, vacation leave, etc.), will we want to collapse them into a single, undifferentiated paid time off (PTO) policy?

If you do not currently have a generalized “PTO” policy, you should strongly consider preparing your business to move in that direction, come January. You should also consider taking any preliminary steps that are necessary or appropriate to be ready to quickly revise your time-off policies when the City Manager issues the administrative rules. This might include, for example, giving your workforce advanced notice that the change is coming, and explaining that Eugene’s sick leave ordinance is the reason for it.

With respect to the last point, the ordinance states that an employer with a PTO policy that provides leave “equivalent [to] or better” than what the law requires will be deemed in compliance. The “equivalent or better” standard is defined only vaguely in the ordinance, but plainly will require that an employee accrue no less than one hour of PTO for each 30 hours worked. In addition, it will require that an employee be allowed to: (1) accrue up to 40 hours of PTO per year; (2) carry over accrued but unused PTO to the next year (subject to a 40-hour cap); and (3) use the PTO for any reason for which he or she could take sick leave under the law (including to address issues related to domestic violence or stalking).

Plainly, some traditional types of paid time off, like a typical vacation policy, will not comply with these standards. Therefore, businesses that currently offer such categories of paid time off may be best served by eliminating them and substituting a single PTO policy that allows employees to take days off for any reason. Otherwise, even if you already provide exceptionally generous paid time off under traditional policies, you will likely have to add an additional week of paid time off to come into compliance with Eugene’s sick leave ordinance.

Should we participate in the rulemaking process?

If this issue is of critical concern to you—from either a philosophical or bottom-line perspective—you may wish to contact city employee Jason Dedrick (541-682-5033 orpaidsicktime@ci.eugene.or.us), who will be coordinating the public input sessions regarding the administrative rules, to find out how you can participate in the rulemaking process. Local businesses need to be heard on some of the critical issues that the council has left it to the City Manager to determine. One of these, as noted, is the important issue of how an “equivalent or better” PTO policy will be defined. Another concerns what conditions the rules will place on an employee’s use of sick leave (for example, how much notice he must provide, and how many days an employee must be absent before his or her employer can require a doctor’s note to confirm an illness).

For more details regarding the ordinance itself, please refer to the following comprehensive summary from Ms. Quick-Warner of the Eugene Chamber of Commerce.

As many of you have read or seen in the media, the Eugene City Council voted 5-3 in favor of a Eugene Sick Leave ordinance (Councilors Syrett, Zelenka, Evans, Taylor, and Brown in favor and Councilors Clark, Polling, and Pryor in opposition) at their work session on Monday, July 28.

Several amendments to the original ordinance were suggested by various councilors and a few were approved and included in the ordinance. The Eugene Chamber, on behalf of our member businesses, along with local partners can claim some modest gains in the end. This includes postponing the implementation date until July 1, 2015, allowing more adequate time to craft administrative rules and an opportunity to watch what, if any legislation comes down from Salem this coming Spring; providing some legal protection for employers via language surrounding private rights of action; inclusion of definitions of employee, employer, PTO, etc. in the ordinance rather than being left up to the administrative rules process; and a limit on how much this can affect businesses outside of Eugene.

Some requirements of the ordinance are highlighted below:

Who the ordinance applies to:

The ordinance applies to employers whose employees are working inside the city limits.

This ordinance will apply to ALL employers/ employees working inside the city, regardless of the size of the business.

Federal, State of Oregon, and any unit of local government EXCEPT for the City of Eugene are exempted from the ordinance,

Employees in the building and construction industry who are covered by a collective bargaining agreement are exempt.

How sick leave will be accrued:

Employees shall earn a minimum of one hour of sick leave for every thirty hours of paid work within the city.

Employees can accrue a maximum of 40 hours of sick leave per year, unless the employer allows for greater accrual.

Employers must allow sick leave to roll over to the next year, but are not required to allow use of more than 40 hours per year.

If an employee separates from employment and then is rehired within 6 months, previously unused sick leave shall be reinstated.

Employees are required to start accruing time beginning July 1, 2015, or at commencement of employment, whichever is later.

Use of sick leave:

Unless employee allows use at an earlier time, employees are eligible to use sick time after 90 days of employment.

If the employer is not located within the city, their employees shall accrue sick time for the hours spent in the city and can be used after the employee has worked within the city for at least 240 hours.

An employee may only use sick leave during the times they are scheduled to perform work within the city.

Sick leave may be used for diagnosis, care or treatment of employee or their family members’ mental or physical illness, injury or health condition, including preventative care. In addition, it may be used for purposes related to domestic violence, harassment, sexual assault or stalking.

Shift trading is allowed if the employee chooses to do so but cannot be required by an employer as a condition of their use of sick leave.

Things that will be left up to the administrative rules:

Specific conditions under which an employee can use sick time.

Additional definitions.

Establishing enforcement protocols.

Defining an equivalent or better policy that would be deemed in compliance.

Adopting provisions to ensure that employers may establish and enforce reasonable policies for employees in order to maintain workplace productivity and prevent abuse.

Dan Webb Howard is an employment law attorney and appellate practitioner with the law firm Gleaves Swearingen LLP. You can contact him at howard@gleaveslaw.com

DISCLAIMER: The information in this article is offered for general information and educational purposes only. It does not constitute legal advice and does not create an attorney-client relationship. You should not act on the information in this article before seeking the advice of an attorney.